Aug 24 Business Changes Lives

I am often asked about my job, and tend give to some pretty uninspiring answers.

The problem is that I keep jumping to the “what” of my job, which sounds generic and unremarkable.I work in an office in Collingwood.The “why” and “how” are much more interesting.

I genuinely believe:

That in 2016, we shouldn’t have inescapable poverty.

That everyone should be given the opportunity to work and earn a living wage.

That kids who are born today should not be trapped by their circumstances.

These are my strongly held beliefs, and I despise people who disagree with them.“Um, that’s quite an intolerant view there Isaac”Yep.

If you believe that in 2016, we should have huge groups of people stuck in extreme poverty, or that in 2016 slavery is acceptable, we won’t get along well at all.

So, given that I believe all of that, my work is centred on using business to help those who are trapped by circumstances out of their control.

Why business?

The old proverb of “Give a man a fish and you feed him for a day, teach a man to fish and you feed him for a lifetime” really resonates with me.

Rather than making a donation that lasts a short time, we’re better off enabling people to change their own circumstances forever.

That’s what business does so well.If you can give somebody a job, they have the ability to make a contribution to the world, and can receive fair compensation for what they do.

This transforms people’s lives.You can equip them to shape their own futures, then you step back and let them go.

Not everyone can work, and that’s ok - business can still help.In this case, we create a business that generates a recurring income stream, which funds issues that aren’t solved by employment, like what Op Shops or Thank You do.

You’re not asking for charity and generosity, instead you’re focused on running a business that delights customers and makes a surplus.

The Lightbulb Moment

The moment I “got it” was in 2012.I was working as a volunteer advisor at Business For Development.We were building a business in Papua New Guinea, designed to help cocoa farmers in the highlands who live in extreme poverty.

Interestingly, these farmers have some of the best cocoa in the world, but nowhere to sell it.The soil is almost magical – crops grow faster and larger than anywhere else, yet there are no roads.

Our solution: change their circumstances.Firstly, we build a road from the village to the main highway.No more perilously transporting bags of cocoa by canoe.

Secondly, we arrange for agricultural experts to train these farmers in how to improve their cocoa trees.It turns out, proper maintenance and planting techniques can double or triple the amount of cocoa each tree produces.

Thirdly, we set up a cocoa processing factory in the main town.Now farmers have somewhere local that will buy their cocoa at a good price.

Bing!The lightbulb fired up in my head.I got it.This wasn’t handing out free money.This was about giving people the ability to make the most of their soil, a clear path to the market, and a customer who would give them a fair price for what they grew.

That’s how a farmer can quadruple their income.That’s how a farmer’s family gets a better education, and affords medical expenses.That’s how you change someone’s life for the better.

This didn’t need to be promoted as ethical, Fairtrade chocolate.It was just good chocolate, and good chocolate will always find a buyer.

What excited me was that we weren’t dependent on the tiny pool of customers who want to support a social enterprise.In fact, we could sell the cocoa liquor (the basis of chocolate) to Mars, and they could use it to make M&Ms.Consumers might never know that they were helping change someone’s life.As long as people keep eating M&Ms, those farmers keep earning a fair wage.Brilliant.

The Catch

That example is what made me understand the tremendous possibilities for how business can change lives.The problem is, these are really hard to get off the ground.You risk building something that isn’t viable, or has weak impact, or both.

Marc Andreessen calls it The Houseboat Problem - Something that’s not a great house, and not a great boat. He said:“Running a business is really hard, and running a charity is really hard, so…”…So trying to run a business with impact is almost impossible.

How can it be done?

“You get what you design for” – Brad GrahamThe only way you can do both is if you deliberately try to do both – these don’t happen by accident.

That means designing a business that has a social mission twisted into its DNA.That means not settling for a 2% financial return.That means not cutting corners or screwing over suppliers – especially if they’re the ones we seek to serve.

My work involves a lot of business modelling, financial modelling, interviews with village groups, soil testing, scribbling ideas on whiteboards, meeting with buyers, meeting with suppliers, having plans scrapped because the numbers don’t work, and pivoting to new ideas.

Life Changing

In 2015 I went to India, to explore an investment in a tea processing factory.

We were visiting “small-hold tea growers” - people who have less than a hectare of land, and have their own small tea fields.

I was introduced to a surprisingly young man, who owned the field we were standing in.

It turns out, he used to be part of a terror cell.He was bored, angry and unemployed, and took to the wrong kind of activism.One day, he worked out that it was more lucrative to own and work in a tea field.So he ditched the rebellion, and became a farmer.

The factory we’re building is there to support the next one thousand tea farmers, and act as a beacon to the rest of the community– put down the gun, pick up the tools, and you’ll be much happier.Not to appeal to morality, but to self-interest – a much more powerful force.

That’s teaching a man to fish.That’s changing someone’s life with a job offer.That’s business solving social problems.